Prop. 16 and PG&E: The Death of Public Power?

The utility-backed measure would make it nearly impossible for Oakland and other cities to join the public power market and increase their renewable energy use.

Oakland Councilwoman Nancy Nadel has been pushing for public power for a long time — the kind of power that allows cities and towns to increase their renewable energy use and decide who supplies their electricity every time they flip the switch. Though the concept is relatively simple, Nadel and other like-minded city officials have experienced countless setbacks in their struggle for choice. When asked how close Oakland was to implementing public power, the councilwoman candidly replied: "Far from it."

The latest obstacle is Proposition 16, an initiative backed by Pacific Gas & Electric Company — to the tune of $35 million. Prop. 16 requires cities or towns that want to establish public power to get a two-thirds supermajority of voters to go along. But convincing a two-thirds supermajority to agree on anything is next to impossible for most cities, including Oakland. "This country was built on majorities," Nadel noted. "So it is very upsetting that a large company like PG&E can come in and demand a two-thirds supermajority and upset the democracy."

In short, if Prop 16 passes, Oakland and other cities throughout California will have to wave good-bye to their plans for clean, non-PG&E electricity. "Any municipality that would like to get out from under the footstep of PG&E would face the same extreme hurdle — because two-thirds is just too hard to get," explained Marcel Hawiger, an attorney at The Utility Reform Network, a consumer rights group.

Here is Nadel's argument for why voters should turn down Prop. 16 and why cities such as Oakland should jump into the public power market: "There are three main reasons for public power. One — the potential discount for customers. Two — we would be buying renewable energy. Three — by increasing our demands, we could start producing more renewable energy, increasing jobs, and sparking the economy."

However, if too many cities and towns join the public power market, PG&E would lose substantial market share. So the utility is trying to stop that from happening. PG&E spokesman Andrew Sovall, for example, warned that electricity "is a complex business." And he argued that Prop. 16 was merely "giving consumers and voters a choice." But he didn't mention the fact that it would also give a small minority of voters veto power over the majority.

Hawiger, by contrast, was blunt: "This is a pure power play by PG&E to prevent even minimum competition."

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